Congratulations. You signed the papers, paid the registered agent, and got your EIN. The company is real.
Now the clock is running.
Most founders assume the compliance obligations start when revenue starts. They don't. A Delaware C-Corp has real tax and compliance deadlines from the moment it exists, regardless of whether you've made a single dollar.
Here's what kicks in immediately, what comes in the first year, and what you need to track as you grow.
Delaware franchise tax
Every Delaware C-Corp owes an annual franchise tax to the state of Delaware, due by March 1 each year. The minimum under the Authorized Shares method is $175 plus a $50 filing fee. Many early-stage startups get hit with a shocking assessment using the default calculation method because it's based on authorized shares, not revenue or value. The Assumed Par Value Capital method almost always produces a lower number for VC-backed companies with large authorized share counts. Make sure you or your accountant knows which method to use.
Federal corporate income tax (Form 1120)
Your company needs to file a federal corporate tax return (Form 1120) for every tax year it exists, even if it had zero revenue and zero expenses. The due date is generally April 15 for calendar-year corporations, with an automatic six-month extension available. A zero-activity return is still a return you have to file.
EIN and initial registrations
If you haven't already, get your EIN from the IRS. You need it to open a bank account, hire employees, and file taxes. It's free directly from the IRS website and takes minutes online. Don't pay a service to do this for you.
Form 5472 (foreign-owned corporations)
If your Delaware C-Corp is owned by a non-U.S. person or entity, you are required to file Form 5472 along with a proforma Form 1120. This applies even if the company had no transactions during the year.
The penalty for missing this filing: $25,000 per form. An additional $25,000 applies for each month the failure continues after the IRS notifies you.
This is the single most commonly missed filing by international founders, and it's also the most expensive mistake to make.
The due date is the same as your corporate return: April 15, or the date of your extension if you filed one.
Incorporating in Delaware does not mean you only have obligations to Delaware.
If your company has employees in another state, a physical office, meaningful activity, or is considered to be "doing business" in another state, that state may require you to register as a foreign corporation operating within its borders. This is called foreign qualification.
Common triggers:
Each state has its own rules about what constitutes "doing business," and the consequences of not registering can include back taxes, penalties, and losing the ability to enforce contracts in that state.
California is particularly aggressive. If you or any employee works from California, even remotely, the California Franchise Tax Board will likely expect an $800 minimum franchise tax payment starting in your first tax year, plus a registration fee.
The moment you hire someone, a new set of obligations begins:
Payroll is not something to piece together yourself. The penalties for misclassifying workers or missing payroll tax deposits add up fast.
If you issued restricted founder shares when you incorporated, you likely need to file an 83(b) election with the IRS. This tells the IRS you want to be taxed on the value of the shares now (usually near zero at founding) rather than when they vest.
The deadline is 30 days from the date the stock was issued. Not from when you get around to it. Not from your next conversation with your lawyer.
If you miss this window, you'll owe income tax on the fair market value of shares as they vest, which can create a significant and unexpected tax bill as the company grows in value.
File it. File it now. Keep a copy and your certified mail receipt.
Immediately after incorporating:
By March 1 (each year):
By April 15 (or extension date) for each tax year:
Ongoing:
These deadlines are not complicated once you know about them. The problem is that most founders don't find out about them until something is already late.
A Delaware franchise tax bill arrives in the mail and the founder didn't know it was coming. A missed 83(b) shows up as a surprise tax bill three years later at a Series A. A Form 5472 penalty lands because no one told the international founder it existed.
The fix is not complicated. It's knowing your calendar before the deadlines arrive.
Every company's calendar is different. Your deadlines depend on your entity type, your ownership structure, the states where you operate, and whether you have employees or investors.
At TaxHero, we build a personalized tax and compliance calendar for your specific company, with reminders before each deadline. It's free.
Get your free personalized tax calendar at taxhero.vc - taxhero.vc/checkin
TaxHero AI helps early-stage U.S. startups manage bookkeeping, tax, and compliance with AI-powered workflows and expert review. This post is for general educational purposes and does not constitute legal, tax, or accounting advice for your specific situation.
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